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The Financial Report July 23, 2015 - news from Europe

ESMA publishes accounting enforcement extracts. The European Securities and Markets Authority (ESMA) published extracts from the European Enforcers Coordination Sessions confidential database of enforcement decisions on financial statements in order to provide issuers and users of financial statements with relevant information on the appropriate application of the International Financial Reporting Standards. (7/21/2015) ESMA notice.

ESMA updates AIFMD guidance. ESMA published updated guidance in the form of frequently asked questions and answers regarding the Alternative Investment Fund Managers Directive. The updates concern the calculation of the total value of assets under management. (7/21/2015) ESMA notice.

EBA publishes report on macroprudential policy measures. The European Banking Authority (EBA) published a report on macroprudential policy measures across the EU. (7/21/2015) EBA press release.

PRA updates on the Capital Requirements Directive IV and GABRIEL. The UK Prudential Regulation Authority (PRA) published Supervisory Statement 29/15 “CRD IV: Interim LCR Reporting,” which describes the specific liquidity coverage requirement (LCR) reporting arrangements which the PRA expects firms to follow on an interim basis in the period between October 1, 2015, the date the LCR standard applies in accordance with the European Commission’s delegated act, and the introduction of mandatory reporting of the new LCR return following adoption of the amending implementing technical standard (ITS) on liquidity reporting by the EC. The PRA also issued an update, including tips, for firms regarding the GABRIEL reporting peak in early August 2015 as a large number of firms are expected to report on the FCA’s GABRIEL reporting system. (7/20/2015) PRA press release.

EBA updates status of liquidity monitoring metrics. The EBA published an update on the application date of its final draft ITS on additional liquidity monitoring metrics. It is highly likely that the application date, which will be specified once the ITS are published in the EU Official Journal, will be postponed by at least three months. (7/17/2015) EBA press release.

Responses to consultation on clearing obligation. ESMA published the responses it received to its consultation on central party clearing obligations. (7/17/2015) Consultation page.

Redemption restrictions under consideration. According to The Wall Street Journal, international regulators and industry participants are urging the consideration of redemption restrictions or limitations as fears of a liquidity shortfall in certain European bond fund asset classes grow. (7/17/2015) Liquidity concerns.

EBA technical amendments to two RTS. The EBA issued technical amendments to the adopted Regulatory Technical Standards (RTS) on the treatment of non-delta risk of options in the standardized market risk approach and to the RTS on the criteria to identify categories of staff whose professional activities have a material impact on an institution’s risk profile. (7/16/2015) EBA press release.

FCA regulation round-up. The FCA published the July 2015 issue of Regulation round-up, which provides regulatory updates by sector. (7/16/2015) Regulation round-up.

EC consults on the impact of capital requirements. The European Commission opened a consultation on the effect of stricter capital requirements for banks. The consultation seeks feedback on issues including proportionality and the impact on smaller business. Comments should be submitted by October 7, 2015. (7/15/2015) EC press release.

FCA guidance on its competition authority. On April 1, 2015, the FCA received the authority to enforce the competition law, conduct market studies and to refer markets to the Competition and Markets Authority (CMA) for in-depth investigation with regard to financial services. The FCA has now published the final guidance on its concurrent competition powers along with a policy statement setting out its responses to feedback received during the consultation period for the guidance. (7/15/2015) FCA press release.

EBA updates information on upcoming stress tests. The EBA published a tentative sample of banks taking part in the 2015 transparency exercise, together with the draft templates illustrating the type of data that will be disclosed. In addition, the EBA released the key features and a tentative calendar of the 2016 EU-wide stress test. (7/15/2015) EBA press release.

EBA oversight and governance requirements for retail banking products. The EBA published final guidelines on product oversight and governance arrangements for retail banking products. The guidelines set out requirements for manufacturers and distributors when designing and bringing to market mortgages, personal loans, deposits, payment accounts, payment services and electronic money. The guidelines are effective January 3, 2017. (7/15/2015) EBA press release.

ECB Q2 bank lending survey results. The European Central Bank (ECB) published the results of its July 2015 bank lending survey. The survey found continued net easing of credit standards on loans to enterprises; net easing of credit standards on loans to households for house purchases; and further improvement in net demand for loans to enterprises and loans for house purchases. It also found that additional liquidity from the targeted longer-term refinancing operations continues to be used for granting loans. (7/14/2015) ECB press release.

FCA proposes disclosure rules for non-ring fenced firms. The FCA opened a consultation on draft rules for non-ring fenced bodies (NRFBs). The proposed rules would specify the information that an NRFB must provide to individuals with financial assets of at least £250,000 that are account holders or that have applied to open an account, including joint accounts, with an NRFB. Comments should be submitted by November 13, 2015. (7/14/2015) FCA press release.

Bank of England Q2 reviews. The Bank of England published the results of its 2015 second quarter survey of bank liabilities. The survey covers developments in the volume and price of bank funding; developments in the loss-absorbing capacity of banks as determined by their capital positions; and developments in the internal price charged to business units within individual banks to fund the flow of new loans. (7/13/2015) Bank of England bank liabilities press release. The Bank of England also published its assessment of the latest trends in the conditions of bank funding and household and corporate credit. The assessment is based mainly on long-established official data sources, such as the existing monetary and other financial statistics collected by the Bank, and other data sources such as surveys of businesses and data from other organizations. (7/13/2015) Bank of England credit conditions press release. See also Bank of England credit conditions survey (7/13/2015).

ESMA updates CCP list. ESMA published an updated list of central clearinghouses authorized under the European Markets Infrastructure Regulation (EMIR) and the Public Register for the Clearing Obligation. The update concerns Eurex Clearing AG, which has extended its activities and services. (7/13/2015) ESMA notice.

FCA enforcement referral criteria. The FCA updated the criteria and outlined the process it uses when deciding whether to refer a firm or individual to its enforcement division for a formal investigation. The publication clarifies how the FCA decides which regulatory tool is the most likely to fulfil its objectives in each individual case. (7/10/2015) FCA press release.

EBA streamlines intra-group financial support for banking institutions. The EBA published final draft RTS and Guidelines on the provision of group financial support, as well as final draft ITS detailing the disclosure requirements of these activities. These Technical Standards and Guidelines specify the conditions under which one entity of a banking group can provide support to another entity of the same group in financial difficulties. (7/9/2015) EBA press release.

EBA technical standards and guidelines on simplified obligations. The EBA published its final Guidelines and final draft ITS for determining whether an institution is eligible for simplified recovery planning, resolution planning and resolvability assessments under the Bank Recovery and Resolution Directive (BRRD). The EBA also issued final draft ITS on the procedures, forms and templates for submitting information on resolution plans under the BRRD. (7/7/2015) EBA press release.

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